Latest OFGEM FiT Guidance

[TedM]

http://www.ofgem.gov.uk/Sustainability/Environment/fits/Documents1/FIT Generator Guidance.pdf

Applies from 1st December 2012. See p74 for a summary of the changes from previous versions.

In particular, changes have been made to the following sections:

• Eligibility Requirements Paragraph 2.1 – 2.15
• Definition of “Commissioned” Paragraph 2.22 – 2.24
• Metering Paragraph 2.25
• Use of previously accredited equipment Paragraph 2.32 – 2.33
• Hydro installations and pumped storage Paragraph 2.36 – 2.40
• Installations in receipt of a grant from public funds 2.41 – 2.46
• Grants that do not meet the exemptions Paragraph 2.56
• Extending an installation which is not FIT accredited Paragraph 2.66 – 2.67
• Energy Efficiency Requirements Paragraph 2.72 – 2.93
• Community Energy Installations and School Installations Paragraph 2.94 – 2.103
• Multi-installation tariff Paragraph 2.104 -2.126
• Preliminary Accreditation Chapter 3 (Paragraph 3.1 – 3.29)
• The Eligibility Date Paragraph 4.12 – 4.13
• Accreditation Number – Technology Codes Paragraph 4.21
• Statement of FIT Terms Paragraph 4.32 – 4.39
• FIT Payments Paragraph 4.45 – 4.47
• Reducing, recouping and withholding FIT Payments Paragraph 4.52
• Appendices 1 – 4

OFGEM are accepting feedback on this up to 11th February 2013 to [email protected]

 

[BruceB]

Not compared word for word with previous versions, but on a quick scan a few things caught my eye:

- 2.7. Sensible stuff on definition of site and eligible installation and their interpretation. Helps to answer a question within the last few weeks on here.

- 2.21. An old chestnut of mine, but they have been quite careful in their discussion of definitions of TIC and DNC not to use kWp of panels anywhere. They still allow for limiting TIC/DNC to be relevant when determining applicable tariff level.

- 2.25. Wording implies to me that the standard situation is intended to be export is measured rather than deemed.

- 2.41. I am no clearer whether a lottery grant falls within the definition of a grant from public funds.

- 2.44. Doctors surgeries do not fall within the category of community energy installation so for PV need an EPC.

- 4.40. I noticed the phrase " if the original FIT Licencee consents" in the paragraph about transferring. It implied to me they do not have to agree to a transfer.

 

[TedM]

Surprisingly universities are excluded from the 'schools' definition as well, so will still need an EPC 'D' or better to get the high tariff.

For transfer of FiTs upon sale of a property it has always been the case that the vendor needs to explicitly release their contract and transfer ownership - but perhaps this has not been expressed very clearly in the guidance before. I can imagine that this will crop up as an issue more often in the future.

This is the new legislation - The Feed-in Tariffs Order 2012

I think that there is still a bit of confusion around the differences between preliminary accreditation and pre-registration which the OFGEM guidance doesn't do much to sort out, especially with how they affect tariff guarantees and Eligibility Date.

 

[TedM]

Here's a stab at teasing out the meaning as it applies to PV:



Another gotcha worth noting is that any application for preliminary accreditation submitted to OFGEM between 1 January and 31 March will be given a tariff date of 1 April, which is not exactly a tariff guarantee at all.

 

[Worcester]

By clearly re-iterating and spelling out TIC and DNC, this ties up with the discussion I had face to face with Gemserve (aka MCS) i.e a 5kWp or greater power of PV panels hooked up to an inverter whose continuous operating power is 4kW (or 3.68 if limited to 16A) should be decalred on the MCS certificate as 4kW (3.68kW if limited to 16A).
So you can happily install 2.5kWp on an East and 2.5kWp on a West facing roof, hook it up to an SMA SB3600TL and on the MCS Certificate and FIT application declare it as 3.68kWp
or with DNO approval 6kW and hook it up to an SB4000TL and declare it as 4.0kWp

 

[Gavin A]

By clearly re-iterating and spelling out TIC and DNC, this ties up with the discussion I had face to face with Gemserve (aka MCS) i.e a 5kWp or greater power of PV panels hooked up to an inverter whose continuous operating power is 4kW (or 3.68 if limited to 16A) should be decalred on the MCS certificate as 4kW (3.68kW if limited to 16A).
So you can happily install 2.5kWp on an East and 2.5kWp on a West facing roof, hook it up to an SMA SB3600TL and on the MCS Certificate and FIT application declare it as 3.68kWp
or with DNO approval 6kW and hook it up to an SB4000TL and declare it as 4.0kWp

where does it say that? I don't see anything changed in the definitions, only a section added saying that if they were unclear about the TIC then ofgem could require an independent assessment to be made of it.

We had this argument out with Ofgem earlier this year and they're 100% determined that TIC means the rated output from the panels in kWp, not the AC output from the inverter, despite their guidance and the legislation saying the complete opposite.

 

[Worcester]

2.17. TIC is defined in Schedule A to Stand Licence Condition 33 as:
"the maximum capacity at which an Eligible Installation could be operated for a sustained period without causing damage to it (assuming the Eligible Low-carbon Energy Source was available to it without interruption), a declaration of which is submitted as part of the processes of ROO-FIT Accreditation and MCS certified Registration."
2.18. DNC is defined in Schedule A to Standard Licence Condition 33 as:
"The maximum capacity at which the installation can be operated for a sustained period without causing damage to it (assuming the source of power used by it to generate electricity was available to it without interruption) less the amount of electricity that is consumed by the plant."

Panels are purely the "Low-carbon Energy Source / source of power", the Inverter inherently limits the maximum capacity at with it can be operated for a sustained period. The Inverter is the Generator, that's one of the reasons why you don't list the make or quantity of panels on the SSEG notification to the DNO (apart for the usual unjoined up processes)

If I have a micro-chp, AD or biomass system, micro-hydro, I won't get more power out of it just beacuse I have a bigger pile of fuel or greater flow of water.

 

[Worcester]

- 2.41. I am no clearer whether a lottery grant falls within the definition of a grant from public funds.

One of our clients has an interesting on-going discussion with their FiT provider over this, the guidance provided by the grant provider (Big Lottery Fund / Awards for all) clearly states the process that the Fit Generator should go through to prove eligibility to prove that these ARE NOT considered Public Funds and it is tied up with the Grant (and FiT payments added together) being less than the de-minimus Commission Regulations.

I think there is some deliberate smoke and mirrors going on here to deter people from using Lottery Funding. The guidance from BLF / AfA is very clear as to the steps that have to be taken and the order in which things must be done and our client has been meticulous in that process. We are still awaiting the outcome.

 

[Gavin A]

Panels are purely the "Low-carbon Energy Source / source of power", the Inverter inherently limits the maximum capacity at with it can be operated for a sustained period. The Inverter is the Generator, that's one of the reasons why you don't list the make or quantity of panels on the SSEG notification to the DNO (apart for the usual unjoined up processes)

If I have a micro-chp, AD or biomass system, micro-hydro, I won't get more power out of it just beacuse I have a bigger pile of fuel or greater flow of water.

unless you've got 10k you're willing to spend on a judicial review, I'd seriously not be pushing that line in regards to the FIT levels (no problem for G83/59 purposes obviously).

Ofgem do not accept it even when sent solicitors letters, and legal opinions from barristors and expert opinions, though for some reason they also won't change their guidance to actually clearly state what their view is on the subject, leaving it until an installation actually gets picked up by the FIT supplier for them to then inform the installer that they interpret it differently to what's in the legislation or their own guidance.

I didn't have the 10k legal costs it would have taken to take them to court for judicial review, so ended up backing off and removing a panel from the customers installation to bring it under the 4kW limit.

They are interpreting the law wrong, but Ofgem will not listen to reason on this.

 

[BruceB]

One of our clients has an interesting on-going discussion with their FiT provider over this, the guidance provided by the grant provider (Big Lottery Fund / Awards for all) clearly states the process that the Fit Generator should go through to prove eligibility to prove that these ARE NOT considered Public Funds and it is tied up with the Grant (and FiT payments added together) being less than the de-minimus Commission Regulations.

I think there is some deliberate smoke and mirrors going on here to deter people from using Lottery Funding. The guidance from BLF / AfA is very clear as to the steps that have to be taken and the order in which things must be done and our client has been meticulous in that process. We are still awaiting the outcome.

Interesting to hear because that was my reading of the regs. From my perspective the issue has gone away now as the church that had the lottery grants did not have enough money to do other associated works, even thought they successfully got planning permission and listed building consent for heat pump, solar thermal and solar PV.

 

[Worcester]

@BruceB

Just had a long chat with our customer that had received the lottery funding, seems like it has all been cleared up and AfA / BLF had issued the WRONG advice, they have now retracted it and said that you can't use their grant AND get FiT

Fortunately my client has excellent set of supporters so they are going to pay the AfA grant back.

The rules wehre changed sometime early 2012 it appears, and subsequent guidance has now been issued by DECC : Department of Energy and Climate Change and Ofgem Grants

Which basically means for new installations private grants OK, lottery funding now not OK. (Could and would have been OK under some rules in 2011)

 

[Gavin A]

dafties. AFAIK lottery money has always been classed as being state aid, so for example hasn't been allowed to be used as matched funding for European funding since the lottery started, or shortly after. That's what I remember from the late 90s when I was involved in voluntary sector fundraising anyway.

We've had a group that was also in that situation, but I'd always told them that lottery was state aid regardless of what any guidance said - think it was EST they'd asked. Oddly enough I think they are still getting FIT due to the fit supplier not having systems set up to allow for paying export only.

At least they've now clarified the situation, but whoever produced that guidance has some questions to answer about how they could make such a fundamental error.

 

[Worcester]

The Problem comes about becasue of the classification of 'State Aid' and the EU crying 'Foul' - previously most of these grants would have not been classified as 'state aid' becasue of the de-minimus rule - It's not 'public funds' it's the definition of 'state aid' that matters.
Up until recently they were allowed, hoever they removed the 'de-minumus' exception and only allowed this where: the grant is made before 1 July 2011, andthe installation is first commissioned before 1 October 2011.
As usual they snuck these changes through along with other more substantial changes that attracted everyone elese attention and they only actually issued this guidance on 17th May 2012....

So prior to 1 October 2011 it was possible under certain qualifying circumstances to have used lottery funding, you can't now (FOR PV), it may however be possible IF there are other works that need to be done, i.e the grant is "a grant made in respect of the reasonable additional costs of an installation to avoid or mitigate environmental harm, where the amount of the grant does not exceed the amount of those costs." - it has already been decided that there are no such works needed for PV, however Micro-hyrdo is a example where it might be applicable - e.g fish ladders etc. So all is not lost..

 

[Gavin A]

I've never read it that way. This is the wording of the 2010 FIT legislation.

(2) Subject to paragraph (3), the Authority must not accredit an eligible installation as an accredited FIT installation unless the FIT generator has given notice that—

(a)​

no grant from public funds has been made in respect of any of the costs of purchasing or installing the installation; or

(b)​

where any such grant has been made, the grant has been repaid to the person or authority which made it.
(3) Paragraph (2) does not prohibit the Authority from accrediting an eligible installation where a grant referred to in sub-paragraph (2)(a) has been made and not repaid if —

(a)​

the grant is a permitted grant; or

(b)​

the grant is not a permitted grant but the Authority is satisfied that the making of FIT payments in respect of the installation would be in accordance with the law relating to state aid.

(4) In this article, “grant from public funds” means a grant made by a public authority or by any person distributing funds on behalf of a public authority.

(5) In this article, “permitted grant” means—

(a)​

a grant made before 1st April 2010 in respect of costs of an eligible installation which was commissioned before 15th July 2009; or

(b)​

a grant made before 1st April 2010 in respect of costs of an eligible installation on a residential property which was commissioned between 15th July 2009 and 31st March 2010.

All national lottery funds are classed as being 'funds distributed on behalf of a public authority' because they are funds collected and distributed in accordance with legislation, so there should never have been any question of them being acceptable under the original legislation.

This is just standard rules relating to stopping things from being double funded. IMO whoever came up with the idea this would be covered by de-minimus rules was a complete idiot, and the EU were absolutely right to set them straight - no reason at all IMO that any organisation should expect to get double public funding for anything.

sorry if you've got caught up in the fall out from decc / ofgem not knowing their arse from their elbow again though.

eta - ah, actually the bit they must have been referring to is the bit about the authority being satisfied that it would be in accordance with state aid laws. They must have assumed the de-minimus rules should apply to each individual installation, whereas presumably someone's now ruled that it applies to the industry as a whole. It certainly goes against the principle of not double or over funding anything from state aid, so I'm not surprised they changed that guidance.

 

[Worcester]

eta - ah, actually the bit they must have been referring to is the bit about the authority being satisfied that it would be in accordance with state aid laws. They must have assumed the de-minimus rules should apply to each individual installation, whereas presumably someone's now ruled that it applies to the industry as a whole. It certainly goes against the principle of not double or over funding anything from state aid, so I'm not surprised they changed that guidance.

The anoying thing is the client was concerned about it so they double and triple checked with AfA, - they had funds for a 4 kw system anyway, the grant allowed them to get a 10kW system, if the grant wasn't going to be allowed they would have just done the smaller system, when they got it in writting from AfA they instructed us to do the 10kW system, they are happy bunnies in the end anyway as a local benefactor has stumped up the difference in cost anyway, so they have paid it back to AfA, they are just pee'd off with bad advice from the fund providers - I DELIBERATELY avoided giving them any particular advice about wether it would or wouldn't be allowed. If it had come to the crunch and they couldn't find the funds we were quite happy to offer a joint ownership / reward arrangement anyway, and 'refunded' the difference so they could have paid the grant back, would have given us as nice local long term source of income

I think you're right and DECC did assume it would be considered per installation as against the whole industry and that is where both DECC and Ofgem just overlooked it in the first place.